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The Hidden Economy: The Labor Market and Tax Evasion

In: Unemployment

Author

Listed:
  • Arne Jon Isachsen

    (Norwegian Institute of International Affairs)

  • Steinar Strøm

    (University of Oslo)

Abstract

When the option of tax evasion is included in the individual’s labor supply decisions, it is shown how the labor market is divided into an irregular and an official market. The impact of changes in tax rates, wage rates and the probability of being caught on the supply of labor in these two markets of the economy is calculated.

Suggested Citation

  • Arne Jon Isachsen & Steinar Strøm, 1981. "The Hidden Economy: The Labor Market and Tax Evasion," Palgrave Macmillan Books, in: Lars Matthiessen & Steinar Strøm (ed.), Unemployment, pages 176-183, Palgrave Macmillan.
  • Handle: RePEc:pal:palchp:978-1-349-05966-9_12
    DOI: 10.1007/978-1-349-05966-9_12
    as

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